Detergents are big business, and the world market is dominated by a few very large companies. America's Procter & Gamble and Britain's Unilever are among the biggest. Economies of scale (notably in the construction costs of the huge drying towers used to convert liquid detergents into powders) mean that it is difficult for small firms to enter the powdered detergent market. It may be a commonly held view that detergents differ very little from one to another, but the fact that differences in washday habits between countries are often very marked means that detergent manufacturers need to take account of these differences if they are to be successful in capturing their share of the global market.
Research conducted on behalf of American detergent manufacturers showed that European clothes-washing practices not only differ from American practices, but also differ between European countries. Procter & Gamble's Walter Lingle had said as early as 1955: ‘Washing habits vary widely from country to country. We must tailor products to meet consumer demands in each nation. We cannot simply sell products with US formulas. They won't work - they won't be accepted.'
The main differences revealed by the research were as follows:
1. European washing machines are normally front loading, with a horizontally rotating drum. The typical US washing machine is top loading, with a central agitator.
2. European machines have a smaller water capacity, usually around 3-5 gallons rather than the 12-14 gallons used by American machines.
3. European machines have a 90- to 120-minute wash cycle, whereas US machines cycle in about 20-30 minutes.
4. Water temperatures are much higher in Europe, with ‘boil washes' using water hotter than 60°C being commonplace. In some countries, the washing machines do not heat the water, so the powders need to work at lower temperatures and in still other countries hand-washing is common.
5. Americans use more synthetic fabrics than Europeans do and also tend to wash their clothes more often.
6. Although many Europeans do not own a washing machine, those who do tend to use more detergent than Americans use, so that the total detergent consumption in Europe is some 30% above US levels.
The problem for the detergent companies has several aspects.
First, the front-loading machines made liquid detergents harder to use.
Second, the much slower washing cycle of European machines meant that the washing powders or liquids needed to remain stable in the water for longer.
Third, the higher washing temperature meant a different formulation for the product - or a programme of re-educating the consumers to wash at lower temperatures.
Fourth, European clothing purchase trends would need to be monitored carefully to see whether there would be an increase in the wearing of synthetics.
Fifth, and in a more positive vein, the European market is clearly an attractive one for US detergent manufacturers since consumption levels are high. The manufacturers were interested in the possibilities of opening up a market for liquid detergents; liquids are much easier to manufacture and the companies were afraid that if they did not establish strong brands in the market fairly quickly, small manufacturers would be able to enter the market and establish a presence. This would create competition in an industry that had previously had very little competitive pressure, due to the high capital costs of establishing plants to manufacture powder detergents. In the meantime, the difficulty of using liquids in European machines was working to the advantage of the major manufacturers.
Although many Americans tend to regard Europe as being one place (in the same way as many Europeans ignore cultural differences between American states), the more sophisticated marketers within the detergent companies realised quickly that separate strategies would need to be worked out for each country and even for regions within each country. This meant that several separate research programmes would need to be carried out, both nationally and regionally. In some cases cultural similarities cross borders; for example, Bavarians often have more in common with Austrians than they do with their fellow countrymen in northern Germany. Striking a balance between finding economies of scale in manufacture and the need to differentiate the product would prove difficult, but the detergent manufacturers did not see these difficulties as being insuperable.
What they needed to do was to identify segments within the European market as a whole, ignoring borders, and develop products that would meet the needs of consumers within those segments. (Case contributed by Jim Blythe)
Questions
1. What are the main difficulties in designing a research programme for the European detergent market?
2. How would you research the acceptability of low-temperature detergents?
3. What problems might arise when collecting secondary data within Europe?
4. The European market can be segmented by methods other than nationality; in other words, segments exist that cut across national borders. How might you go about identifying thes000e segments?
5. What methods might be available for monitoring pan-European fashion-buying trends?